Essential Elements of a Contract: Consideration

Flashcards covering the definition, general rules, and key legal cases regarding consideration in contract law as presented in the lecture notes.

Consideration

The price for which the promise of the other is bought; it may consist of some rights, interest, profit or benefit accruing to one party, or some forbearance, detriment, loss or responsibility given, suffered or undertaken by another.

Currie v Misa (1875)

The legal case that defines consideration as a benefit to one party or a detriment/loss suffered by the other.

Void

When a contract is not valid, meaning it is no contract at all and both parties have not entered into any contractual relationship.

Deed (Agreement under seal)

A formal agreement that must be in writing, stamped, sealed and delivered; it is the one exception where an agreement is formed with no consideration.

Real Consideration

Consideration that has some value in the eyes of the law (e.g. money or kinds); concepts like love or affection are not recognized as valuable consideration in court.

Adequate Consideration

The rule that consideration does not have to be of equal value to the promise given; courts do not decide on value if the parties agreed to the exchange at the time of the agreement.

Thomas v Thomas (1842)

A case where a nominal rental of $£1$ per year was held to be real and valuable consideration, even though it was not adequate or sufficient as actual rental for the house.

Chappel & Co. Ltd. v Nestle (1960)

The 'wrapper case' establishing that three wrappers from chocolate bars are considered sufficient consideration despite having very little intrinsic value.

Executed Consideration (present)

Present consideration where the promisee gives consideration at the same time as the promisor makes his promise.

Executory Consideration (Future)

Future consideration where the promisee gives consideration at some future date in return for the promise made by the promisor.

Past Consideration

An act or consideration given before the promise was made; it is not considered good or valid consideration in law.

Re: McArdle (1951)

A case where an agreement to pay $£499$ for repairs was ruled unenforceable because the work had been completed before the promise to pay was made (past consideration).

Tweddle v Atkinson (1861)

A case establishing the rule that consideration must move from the promisee; a son could not enforce a contract between his father and father-in-law because he provided no consideration.

Gratuitous Promises

Promises such as free gifts that the law generally will not recognize unless they are made by deed.